The Total Payroll Is $6,000 Per Day of Work

question 215

Multiple Choice

The total payroll is $6,000 per day of work.If the accounting period ends on Tuesday of a given week,what adjustment must be made to the company's accounting records?

• A)Increase Salaries payable by $12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• B)Increase Salaries payable by $12,000 and increase shareholders' equity by recognizing Salaries expense for the same amount.
• C)Decrease Cash by $12,000 and decrease shareholders' equity by recognizing Salaries expense for the same amount.
• D)No adjustment is necessary because there is no expense until the employees are paid on Friday.